First, the "repeal Obamacare" idea is simply nuts. The Repubs won't have anything near a veto proof majority and the Dems in the Senate, even if the Repubs take the Senate, can just act like the current minority party in the Senate is acting.
Second, it's true that "progressive" legislation will be harder to pass. But it seems that it was already next to impossible to pass anyway. Cap & Trade is already dead, card check already dead, more stimulus, already dead. I don't see any big change here.
Third, it's true that there will be more support for DADT and the wars and our brutal immigration policy, but again, the current administration was already vigorously prosecuting these and other horrible policies.
Finally, I do think there will be a change in the mix of tools used to achieve deficit reduction, with (and I admit this may be more of a hope than a reality) more emphasis on spending cuts and less on tax increases. In any event, I think a Republican House makes deficit reduction at least a little bit more likely.
PS: Am I the only one who'd like to see Christine O'Donnell in the Senate? Just for the Caligula's horse kind of vibe it would have?